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Bus Services Bill: congestion ahead?

The Bus Services Bill has at long last made an appearance in the House of Lords on 19 May 2016, a day after its announcement in the Queen's Speech. The bill had previously been trailed as the "Buses Bill" in 2015 after a period of workshops and consultation. Ahead of the Bill's 2nd Reading on 8 June 2016, other than the rebranding, is there anything new and where are the potential potholes on its route to Royal assent and its ultimate destination of 2017 mayoral elections?

All aboard?

By and large, the Bill covers the areas discussed at length during the DfT's Bus Reform Workshops of 2015 albeit at a high level. In that respect, there few surprises. Much of the detail remains something which will only be addressed in later regulations or mandatory guidance for which the Government intends to consult on later this year. Nevertheless, outside of the main structural reforms (see separately below), the key areas of the Bill are:

The ability of the Secretary of State for Transport to make regulations requiring the open sharing of services data (in particular on routes, timetables, punctuality and fares). The current Government intention is to phase this in between 2017 and 2020; and

The Bill additionally removes the requirement for private operators to register rail replacement services and introduces a blanket prohibition on LTAs forming new bus companies.

Structural reforms

The main body of the Bill deals (as expected) with structural reforms. This meets the Government's commitment to improving and adding to the `toolkit' of options for LTAs for regulating buses outside of London. The new options are Advanced Quality Partnerships (AQPs) and Enhanced Partnership Plans and Schemes (EPPS) with the option of franchising reserved (at present) for mayoral combined authorities (MCAs). A summary of the options and the criteria for their use is presented below:

All subject to mandatory regulations and guidance yet to be made or consulted on

Together these options certainly provide plenty of food for thought for the bus industry and LTAs. AQPs certainly make statutory partnerships more flexible than the Quality Partnerships which they will replace and closer in scope to many existing bus voluntary partnerships. EPPS appear to suggest the interesting proposition of LTAs being able to replicate a "franchise-like" bus network (including importantly in respect of look and feel) but without taking on itself the costs, risks and liabilities of a franchise.

Heavy traffic ahead

The Bill is at an early stage and the DfT has already accepted in its overview paper accompanying the Bill that it is likely to be "amended in places". As a matter of principle, aspects of the Bill (in particular franchising) were always going to be controversial. That is already proving to be the case and will continue to be the case going forward both inside and outside Parliament.

Key issues will likely include:

The extent to which AQPs and EPPS will be genuine partnerships (which are more likely to succeed). The fact that EPPS expressly do not require LTAs to commit to any pro-bus facilities or measures and that AQP does not specify any degree of materiality for LTA support raises concerns of `onesided' partnerships. Additionally, although operator consent is a key requirement, it seems that objections of an `inadmissible' nature or an `insignificant' number (which are not defined yet) can be overridden. This would effectively compel such operators to participate in `partnership'.

In respect of franchising, the criteria for a franchise case appear to be quite weak and not conducive to robust decisionmaking. These include the apparent position that:

a MCA can cherry-pick a single comparator (not necessarily the most credible) rather than being required to test against all realistic alternatives

a MCA need only assess based on a "consideration" of the five-point business case as opposed to having to meet and satisfy each

the only independent assessment a MCA is required to undertake is an audit which appears more like a `sense-check' rather than any kind of robust expert examination

operators have little formal engagement with the process until the final consultation phase even though they are arguably best placed to identify flaws in any assessment. This is despite the fact they are subjected to an onerous requirement in certain circumstances to provide a strikingly extensive range of data to LTAs (some of which would be highly commercially confidential)

the consultation process itself appears secondary and, for reasons unknown, is narrower than that required to implement either an AQP or EPPS, despite the more significant consequences. For example, the Competition & Markets Authority is not included (despite an obvious interest in the elimination of competitive service provision) and nor are persons who may have legitimate interest such as users themselves (other than through representative bodies)

although the possibility for `service permits' for other franchise operators exist in theory since any other service would arguably have "an adverse effect" on franchised services (no matter how minor), it is not clear how they can work

The fact that franchising appears to include no provisions for operator compensation is likely to ensure that the franchising proposals remain highly controversial.

Destination 2017?

The Government's goal remains to have powers in place by the mayoral elections in Manchester and elsewhere (even though it is intended that certain provisions will be phased in). There will be intensive debate over the Bill provisions as expected from one of biggest shake-ups of the bus industry in England outside of London since deregulation in the 1980s. Future consultations on regulations and mandatory guidance yet to be released to support the Bill provisions will ensure that the debate stays high on the agenda throughout this year.

It is certain that the Bill will be amended, as the DfT anticipates. There will be concern that the political imperatives of mayoral elections may result in a rushed outcome which jeopardises the widely accepted need to increase bus use into the future.

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